Investopedia

Continue to Site »

Bank Panic of 1907

Filed Under » ,
Dictionary Says

Definition of 'Bank Panic of 1907'

A financial crisis that arose near the beginning of the twentieth century as result of a plan to limit the popularity of trust companies. The banking industry was unsettled with the emerging successes of trusts companies, so they attempted to bring financial ruin to F. Augustus Heinze's Knickerbocker Trust in order to falter the public's favor in trust companies. Since the Knickerbocker Trust was unable to receive any financial support from other financial institutions to save itself from failure, the public started to fear that the banking and trust industries were experiencing liquidity issues and thus starting to perform bank runs.
Investopedia Says

Investopedia explains 'Bank Panic of 1907'

The panic was ultimately quelled when the federal government provided over $30 million in aid to the situation, and when J.P. Morgan and others orchestrated deals to bring confidence and liquidity back to the financial markets.

One of the most important outcomes of the Bank Panic of 1907 was the eventual development of the Federal Reserve System. Many felt that the successful implementation of a central bank system could prevent future problems by providing an extra source of liquid assets for financial institutions to tap into.

Articles Of Interest

  1.

    The 5 Most Influential Bankers Of All Time

    These bankers shaped the current financial system - though some didn't live to see the fruits of their labor.

  2. The Kingpin Of Wall Street: J.P. Morgan

    From robber baron to the hero of the Panic of 1907, this man helped shape Wall Street as we know it.

  3. Examining Credit Crunches Around The World

    Market tops and bottoms have proliferated the financial markets throughout history. Learn how countries dealt with these tough economic periods.

  4. The Federal Reserve

    Few organizations can move the market like the Federal Reserve. As an investor, it's important to understand exactly what the Fed does and how it influences the economy.

  5. The Greatest Market Crashes

    From a tulip craze to a dotcom bubble, read the cautionary tales of the stock market's greatest disasters.

  6. Introduction To The Continuing Claims Report

    This weekly economic release contains important information concerning unemployment levels and insurance.

  7. Breaking Down The Fed Model

    Learn what pundits mean when they say that stocks are undervalued according to the Fed model.

  8. 4 Of The Most Shocking Stock Increases and Falls

    When a black swan event occurs, a market correction of massive proportions ensues.

  9. A History Of Apple Stock Increases

    Apple's innovative products are always in demand, but do Apple's product launches immediately lead to higher prices?

  10. Corporations Kicked From The Dow Jones

    The Dow measures the economic condition of the United States. Here are some corporations that have fallen out of favor.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Disaster Loss

    A special type of tax-deductible loss, similar to a casualty loss, where a loss has been incurred by taxpayers who reside in an area that has been designated as a federal disaster area by the President.

  2. Fool In The Shower

    The notion that changes or policies designed to alter the course of the economy should be done slowly, rather than all at once.

  3. Pattern Day Trader

    An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

  4. Cost-Push Inflation

    A phenomenon in which the general price levels rise (inflation) due to increases in the cost of wages and raw materials.

  5. Happiness Economics

    The formal academic study of the relationship between individual satisfaction and economic issues, such as employment and wealth.

  6. Affluenza

    A social condition arising from the desire to be more wealthy, successful or to "keep up with the Joneses." Affluenza is symptomatic of a culture that holds up financial success as one of the highest achievements.
Trading Center
Array ( )
taggroups(for debug only):
Array ( [0] => Personal Finance )